Capitalism’s Revolutionary Cultures

Joyce Appleby, one of our most distinguished historians, opens this sweeping history of the world economy since the sixteenth century with a minimalist definition of capitalism as “a system based on individual investments in the production of marketable goods” (p. 3), a definition she quickly abandons for a more expansive view of capitalism as “as much a cultural as an economic system” (p. 4). By the conclusion of her engaging survey of capitalism in world history, she finds that capitalism “is a set of practices and institutions that permits billions of people to pursue their economic interests in the marketplace” (p. 433). One of her main concerns in this book is to persuade economic historians of the cliometric school to abandon the minimalist definition in favor of the much broader view of capitalism as a cultural and institutional system. While I am sympathetic to the effort, I am not sure it succeeds. Appleby is deeply suspicious of economics. The extent of her hostility is suggested by her failure to include a single table or graph in this long book. While Appleby makes a strong case for capitalism as a culture, I suspect that her hostility to the style and methods of historians of the cliometric persuasion will lead them to quickly dismiss her work as not worth their attention. This would be unfortunate, for Appleby has an important message that could improve our understanding of capitalism’s transformative power.

Appleby begins her analysis with the concept of a traditional society, organized around an economy of scarcity, especially of food. Although perhaps 80 percent of the work force labored in agriculture, famine was an ever-present possibility. Since hungry subjects often proved unruly, economic and political concerns were linked. Fear of famine justified authoritarian rule. “Few doubted that those vulnerable to famine needed to be protected from the self-interested decisions farmers and traders might make about what to do with the harvest if they were left to themselves” (p. 5). As a result, rulers closely regulated the economy, leaving few opportunities for change, innovation, risk taking, or experiment. These were societies in which status was inherited rather than achieved, their cultures characterized by deep hostility to novelty and change. While this seems a blunt analytical instrument, it is adequate to Appleby’s purpose, since the creative destruction of traditional societies is the core accomplishment of capitalist revolutions.

While Appleby, who describes herself as “a left-leaning liberal with strong, if sometimes contradictory, libertarian strains” (pp. 17–19), finds much to praise in capitalism, she is not blind to its dark side. Indeed, she devotes considerable attention to the problems that came in its wake: environmental degradation; instability; inequality, both within and between nations; and the disruptions, insecurities, and anxieties that the revolutionary transformations that accompany capitalism bring in their wake. One cannot, she argues “celebrate the benefits of the capitalist system without taking account of the disastrous adventures and human malevolence that this wealth-generating system made possible and sometimes actually encouraged” (pp. 23–24).

Appleby is at her most compelling when discussing the intellectual history of capitalism. She provides helpful commentaries on the usual suspects: Adam Smith, Marx, Weber, and Shumpeter. But I found most interesting her analysis of the substantial pamphlet literature generated by less well-known analysts in late seventeenth-century England, a source she has mined before to good effect (p. 3).¹ As capitalism transformed the economy, many writers, some of them hired pens, were employed by the great overseas trading companies (especially the East India Company) and domestic manufacturers to defend their interests. Most of the writers were obscure, but a few—Newton, Locke, and Defoe, for example—were famous for other reasons. These pamphleteers worked to explain and justify the new economy. They explored and debated a host of crucial topics: usury, the responsibility of employers to their employees, money, the role of foreign trade in promoting domestic prosperity, and the nature of markets. In this way, they gradually...